S&P 500 Valuation Multiples

S&P 500 Valuation Multiples The price-to-sales ratio of the S&P 500 Index suggests that stocks are as expensive as they were during the Internet bubble. The P/E ratio also remains at high level. Image: Tomasz Hońdo

MSCI ACWI and S&P 500 Forward P/E Multiple

MSCI ACWI and S&P 500 Forward P/E Multiple This year, the forward P/E multiple for global equities and for the S&P 500 increased by approximately 24%. Historically, multiples contract or remain flat following years of big multiple expansion. Image: Morgan Stanley Research

Multiple Expansion – Year-Over-Year Change in the S&P 500 Forward P/E

Multiple Expansion – Year-Over-Year Change in the S&P 500 Forward P/E Since the beginning of the year, the multiple expansion explains the S&P 500 return. Historically, S&P multiples contract or remain flat following years of big multiple expansion. Image: BofA Merrill Lynch US Equity & US Quant Strategy

U.S. Equities and The World: Earnings Growth vs. Multiple Expansion

U.S. Equities and The World: Earnings Growth vs. Multiple Expansion Since the 2009 low, the strong performance of the U.S. markets comes from earnings growth (73%) and multiple expansion (27%). You may also like “S&P 500 Return: Earnings Growth vs. Multiple Expansion.” Image: Goldman Sachs Global Investment Research

S&P 500 Total Return Decomposition by Sector

S&P 500 Total Return Decomposition by Sector Financials is the only sector that has experienced multiple contraction for the past decade. Image: BofA US Equity & Quant Strategy

U.S. Yield Curve and Growth/Value P/E Ratio

U.S. Yield Curve and Growth/Value P/E Ratio The chart below shows that the shape of yield curve explains nearly 50% of the variation in value vs. growth multiples. Actually, when the U.S. economy is sluggish, investors prefer growth stocks. Image: BlackRock, Inc.